Clough wants a chunk of Forge

Perth-based engineering and construction group
Clough
is proposing to boost its exposure to the oil and gas market with a proportional takeover offer below market price for
Forge
, which includes buying about $19.5 million of shares in a placement.

Under the recommended deal - which requires the approval of Forge shareholders - Clough will buy 10.25 million shares at $1.90 a share, below the company’s last closing price of $2.31.

Forge shareholder approval is needed for the transaction to go ahead, but the company said investors representing 41.9 per cent of Forge’s issued capital intended to vote in favour of the placement.

Following the placement, Clough intends to make a proportional cash takeover offer at $2.10 per share to all existing Forge shareholders for 50 per cent of their shares in Forge.

Clough’s offer extends to unlisted options in Forge, which has a market capitalisation of $158 million.

If the transaction proceeds, Clough may emerge with a stake of between 31 per cent and 56.5 per cent.

Forge is being advised by Blackswan Equities and legal firm Blakiston & Crabb.